The Most Valuable Liquor Company in the World is Now in China

April 10, 2017

Chinese firm Kweichow Moutai is now the largest liquor company in the world, surpassing Johnnie Walker-brand owner Diageo with a market value of $71.5 billion Friday in Shanghai.

Based in the southwestern province of Guizhou, the firm’s Moutai signature drink, a high-end type of baijiu, has an alcohol content of 53% and is distilled from sorghum and rice.

The company’s stock has soared more than 50% over the past year, according to CNN Money.

Considered the “drink of diplomacy,” Moutai was used to toast President Richard Nixon on his historic trip to China in 1972.

It is still the drink of choice at lavish banquets and the number one gift to give on special occasions, such as closing big business deals.

China’s President Xi Jinping’s anti-corruption campaign in 2012 had an adverse affect on Moutai sales, but it was able to bounce back.

According to Shaun Rein, the founder of China Market Research in Shanghai, Moutai reduced the price of its baijiu to make the drink more affordable and widened distribution to make it a lot more accessible.

The company eventually hooked younger consumers who were able to afford the price tag — a 500 ml bottle (about one pint) can cost as much as $580 — instead of the government officials it traditionally catered to.

About 95% of Moutai’s sales are from the Chinese market, and the company has attempted to reel in some fans outside of the country, but to no avail.

The company has been able to increase prices, with the retail cost of its Feitian-label jumping RMB 100 ($14.52) each month for most of 2016, the Financial Times reported.

Rein also said that Moutai is the most popular brand in China because “they just don’t have any real competitors.”

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